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Hot take: DTC is overhyped.
Let me explain.
Nike Direct, is often cited as an example of dtc success– they made 66% of revenue from direct sales last year.
…Yet it had a negative result on margins.
Unless you have something like AWS to float the boat, distribution without retail partners is really expensive.
It’s also really inconvenient…
Nike is opening another 30 brick and mortar locations after all.
But maybe margins aren’t the point? Maybe Nike is thinking about it in the long term.
Because pulling your product from any store that isn’t at least athletic adjacent is definitely a brand reputation move.
Direct sales as branding.
As investment in image.
My guess is Nike knows what they are doing, but it shouldn’t make brand managers everywhere try to do the same.
It just depends on if the priority is sales or reputation and image.
BOOKS:
Ogilvy’s “To Brand or Not to Brand”
Quote:
“Brand Building is the worst form of growth hacking, except for all the others.”
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“Hit Makers: The Science of Attention in an Age of Distraction” Derek Thompson
Quote:
The first is that neophobia, or preference for the familiar, is not a universal human constant. Rather, there is a spectrum between people who like things that are extremely familiar and people who like things that surprise
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Just buy it if you can.
MISCELLANY
The Hidden Structure of Hairballs– I was not properly informed what a career in science had the potential to be.
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A really really good thread that I might turn into a booklet. Link
A few favs:
Parkinson's Law: Work expands to fill the time allotted for it. No matter the size of the task, it will often take precisely the amount of time you set aside to do it, because more time means more deliberation & procrastination.
Hitchens' Razor: What can be asserted without evidence can be dismissed without evidence. If you make a claim, it's up to you to prove it, not to me to disprove it.
The Messiah Effect (my term): most people don't believe in ideals, but in people who believe in ideals.
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Read the below list, and try to guess what it is describing. Answer at the end.
STRAT SCRAPS
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Sometimes I talk to people
I’ve shared some thoughts on the future with Matt Klein, publisher of Zine newsletter and new Head of Insights at Reddit. Dropping in the next week or so, but make sure you’re subscribed so you can read while still hot.
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I’ve also shared a bit of random thoughts with Rosie and Faris, of Genius Steals. Which went live today and, if you missed it, you can see it here. And subscribe so you don’t miss it next time.
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Answer: It’s from the CIA Field Manual, laying out strategies for how to sabotage an organization from within.